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Business

Wells CEO forfeits millions amid sales scandal

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Opening sequence

Business

Wells CEO forfeits millions amid sales scandal

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COMING UP:Wells CEO forfeits millions amid sales scandal

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00:00:00
>> I accept full responsibility.>> The embattled head of Wells Fargo forfeiting tens of millions of dollars amid the bank's growing sales practices scandal. CEO John Stumpf relinquishing $41 million in unvested equity awards and forgoing his salary in what marks one of the largest penalties ever levied on the head of a major financial institution.
00:00:20
Reuters Dan Fried says the amount is significant.>> Every time we have a scandal like this it seems to get a little bit more serious in terms of the amount that a CEO has to give back and the amount that the CEO Is held responsible. In this instance, you've got John Stumpf giving back a quarter of his compensation earned over 35 years at the bank.
00:00:45
So that's without question the biggest step that we've seen so far.>> Carrie Tolstedt, formerly in charge of the firm's community banking unit at the center of the crisis will give up options worth about $19 million. Neither she nor Stumpf will receive a bonus. Wells, the third largest bank in the US, came under fire earlier this month.
00:01:04
After a government investigation found employees tried to meet sales targets by opening as many as 2 million fake accounts without customer's knowledge.>> I am deeply sorry that we failed to fulfil on our responsibility to our customers, to our team members and to the American public.>> The company reached a 190 million dollar settlement with regulators and fired more than 5000 mostly low ranking staff.
00:01:29
But Wells is under pressure to hold its executives accountable.>> Evidently, your definition of accountable is to push the blame to your low level employees, it's gutless leadership.>> Lawmakers criticized Stumpf for not culling back pay at a Senate Banking Committee Hearing last week. Some also calling for his resignation.
00:01:47
He will face questions from the House Financial Services Committee on Thursday.